Many U.S. companies started the year by trimming their payrolls, and retailers were by far the most aggressive at doing so.
According to outplacement firm Challenger, Gray and Christmas, American employers announced plans to cut 190,410 jobs in the first quarter of 2019, 35.6 percent more than the 140,379 they announced in the same quarter last year. The latest figure is the highest first-quarter tally in a decade, though fortunately still far from the 562,510 cuts announced in the first three months of 2009.
The retail sector, which has faced challenges with the rise of e-commerce and changing consumer preferences, has cut more jobs than any industry for the past three years and looks poised to continue the trend in 2019. In March, retailers announced plans to eliminate 4,860 positions, bringing its first-quarter total to 46,061. While higher than any other sector, this is still 18.5 percent lower than the 56,526 it cut in the same quarter last year.
Several bankruptcies contributed to the job losses: in February, Payless ShoeSource announced that it was filing for bankruptcy for the second time in two years, laying off 16,000 employees in the process. This came just a month after bankrupt children’s retailer Gymboree said that it would eliminate 10,000 positions.
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Bankruptcies in general contributed to a greater share of overall job cuts, increasing 33.8 percent year-over-year to 40,218, according to the firm’s research. Store, plant and unit closings added an additional 27,380, more than double the previous year.
It’s not all bad news, though. “While retail is by far responsible for the highest number of cuts recently, the sector is also constantly hiring,” said Challenger, Gray and Christmas VP Andrew Challenger. “In fact, The Home Depot announced it would hire 80,000 workers for the spring and summer months.”
The retail industry is one of the largest private-sector employers in the country, accounting for about 15.8 million American jobs, so its future has widespread implications for the economy as a whole, and further changes in how and where people shop could continue to impact employment.
“Companies appear to be streamlining and updating their processes, and workforce reductions are increasingly becoming a part of these decisions,” said Challenger. “Consumer behavior and advances in technology are driving many of these cuts.”
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